Abstract Due to increasing disease resistance to existing drugs and a dwindling pipeline of new drug leads, our need to generate chemical diversity is becoming ever more important. The best source to mine chemical diversity remains to be from natural products. In the post-genomics era, new approaches using the vast genomic information, as well as powerful tools in synthetic and chemical biology must be developed and applied towards the mining of natural chemical diversity. We believe that many of the microorganisms already identified and cultured contain far more biosynthetic potential than what has been tapped so far, and the manipulation of the known biosynthetic enzymes will lead to even more diversity than currently accessible. Therefore, capturing the full biosynthetic potential of Nature offers immense promise towards structural diversification and drug lead identification. In addition to discovering the natural products that have new structures and biological activities, it is equally important to identify new enzymes that responsible for generating the structural complexities. Compared to enzymes found in primary metabolism, biosynthetic enzymes catalyze significantly more diverse and complex transformations that lead to the dazzling structural features seen in the natural products. Therefore, complete understanding of the programming rules and enzymology of new enzymes discovered from the natural product pathways is needed. Deeper insight into the protein sequence-activity relationships of the enzymes can also enable more rational prediction of natural product structures from genome sequences, and can in turn further accelerate the genome mining efforts towards new natural products. In this proposal we will develop strategies to mine the chemical diversity encoded in filamentous fungi, discover the enzymes that give rise to the structural complexity and engineer enzymes into useful biocatalysts where applicable. We will 1) develop and apply new tools to explore genetically encoded chemical space from different filamentous fungi species based on phylogeny and bioecological niche; 2) develop and validate a target-guided mining approach that connects genomics-based mining to clinically relevant biological activity; 3) perform biochemical characterization of enzymes in fungal biosynthetic pathways to establish sequence- activity relationships. Programming rule of PKS will be studied, as well as those of oxidative enzymes; and 4) perform structure-guided and evolutionary engineering of proteins discovered from biosynthetic pathways towards becoming useful biocatalysts.